Buy Jubilant Life Sciences, target Rs 1046: Anand Rathi

Anand Rathi

Jubilant Life Sciences reported good set of numbers for the quarter under review. Revenue from operations improved by 15 percent year-on-year to Rs 23,771 million. This was on account of robust performance in pharmaceuticals segment (contributing 60 percent to the revenue of JLS), which reported revenue of Rs 14,178 million, up by 29 percent YoY, mainly due to healthy growth reported in generic pharma segment driven by both API and finished dosages. Life Science Ingredients (LSI) segment, which contributes 38 percent to revenue of JLS, reported revenue of Rs 8990 million, down by 3 percent YoY.

On profitability front, the EBITDA from operations for the quarter improved by 18.3 percent year-on-year to Rs 4,933 million. EBITDA margins improved by 59 bps YoY to 20.8 percent. Margin expansion was led by higher gross margin at 63.2 percent owing to improved business mix. Net profit grew 22.7 percent YoY to Rs 2,608 million due to a strong operational performance, higher other income and lower interest cost.

The company has increased production capacity in the CMO business by increasing shifts to 24/7 at Spokane (US) during the quarter to cater to the incremental demand. The company is also augmenting capacities at Roorkee to cater to increasing demand for generics from EU and ROW markets besides US markets.

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d. The management maintains its guidance of H2-FY19 to be better than H1-FY19 on both pharma and LSI segments driven by growth in existing products and capacity expansions for new product launches.

e. The Capex stood at Rs 1340 million for Q3-FY19 and Rs 4020 million for 9M-FY19. JLS has planned to invest about Rs 5500 million in capital expenditure in FY19. In addition, JLS plan to invest Rs 3000 million in R&D during the year, including Rs 1500 million in Product Development expenditure.

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First Published on Mar 10, 2019 09:40 am

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